Why doesn't android make apps runnable completely on SD card by default? When I was testing a samsung galaxy s2, I was constantly frustrated by the limited amount of space on the phone, and the fact many apps couldn't be transfered to the SD card.

Most SD card interfaces are really, really slow. Putting the core of the app in main flash and assets in flash makes sense in some scenarios. It's two bad we don't have three choices: all in main, split, or all on SD.

It's an anti-piracy measure.

I'm not sure why I'm getting downvoted.

Originally, official Android builds would not allow apps to be installed to removable media to prevent users from copying their purchased apps to multiple devices. More recently, Android has offered encrypted installs and server-side validation methods so that apps can be installed to removable media yet still tied to the device they were purchased on.

If I have stated anything factually incorrect, can someone speak up?

You're not necessarily wrong, but they could customize Android to remove that limitation.

It also supposed to be an open console with Free-to-Play games bundled...

"When I was testing a samsung galaxy s2"

I would not consider the S2 as being in any way definitive of "Android". The only Android devices that I would attach that label to are the ones with Nexus in the name. As far as running apps from the sdcard, neither the Nexus S, the Galaxy Nexus, nor the Nexus 7 even have an sdcard slot and the Nexus 7 and Galaxy Nexus have full access for apps to the entirety of internal memory, e.g., if you have a 32 GB device, you have access to whatever's left over of that 32 after the room set aside for the system so accessing the "sdcard" is a moot point despite there being a mount point for it for backward compatibility.